Vending machines have been around for decades, but that doesn’t mean the market is stable. Just with every other industry segment, changing technology and customer needs are driving innovation in the industry. So what should vending operators be keeping an eye on this coming year.
We sat down with Alan Munson, co-founder of Parlevel Systems, to talk about the top things to consider in 2015. He started by saying there aren’t that many things changing in vending, but the changes that are happening will have a big impact in the industry. Some of the topics he reviewed included mobile payments, micro markets, telemetry, and a look at how the industry is shaping out.
Mobile payments is an area that vending operators should be watching, especially with the introduction of Apple Pay towards the end of last year. Up until then, vendors like Payrange and Byndl offered mobile solution
s outside of the card swipe environment. With Apple Pay and NFC, operators could integrate mobile payments using NFC-enabled swipe terminals, giving them more payment flexibility.
But with any new technology, customers need to be made aware of its availability and how to use it. Operators should make sure machines are labeled that take Apple Pay. The best locations are those with a younger demographic like college campuses.
One segment that came onto the scene a couple of years ago was micro markets. This is probably an area where vending operators can truly compete with convenience stores. “A lot of micro markets are popping up and innovating, driving the price down,” Munson said.
One segment he’s watching is creating a kiosk-less micro market, leveraging self-service and cashless payments. That alone can lower the cost of entry and allow more flexibility. But even with the potential of 30-35% more sales, micro markets do require closer management, both in product mix and performance.
Two technology trends that go hand in hand are telemetry and vending management solutions. While telemetry was on the rise in 2014, there is still plenty of room for growth this coming year. With costs dropping in terms of both hardware and network, Munson expects operators will connect more of their machines.
But telemetry alone doesn’t solve the problem. When those machines connect, they load their data to a vending management solution, which is where the real magic happens. The biggest benefit is in pre-kitting, where drivers know what their route needs are before even leaving the warehouse.
However, the real gold with telemetry and the software is in the analytics. “When I was an operator, we used to run commission spreadsheets. Now all that information can be in one application,” he said. “When you move to more informed operators, you begin to see where full control can be gained.”
To prepare for this onslaught of new data, you need to have the structures and processes in place to be ready to react to what the data is telling you, he said. Up to this point, the data may not have been presented in easily understandable formats, but that’s going to change.
Looking at the industry, Munson said that the past year saw several companies folded into larger ones, reducing the competitiveness of the market. Independent, medium sized operators are the real backbone of the industry, he said. Those operators provide more diversity of product offerings and sometimes better prices.
But to stay competitive, those operators will need technology to help them compete with the large companies. This is where Parlevel Systems plans to focus on during the coming year.
